Before Paxos issued a press release at 6 a.m. EST on Monday, the BUSD stablecoin had around 16.16 billion tokens in circulation. Over the past eight hours, nearly $290 million has been redeemed, bringing the number of BUSD in circulation to 15.87 billion.
Stablecoin BUSD Sees Increased Buyback Activity During Regulatory Review
The BUSD stablecoin is seeing increased activity on Monday as the third-largest stablecoin by market capitalization saw 286,720,127 BUSD bought back in about eight hours. The heightened activity began the day before, when reports claimed that the U.S. Securities and Exchange Commission (SEC) had sent Paxos a Wells notice regarding a potential fee. Earlier reports also claimed that the New York Department of Financial Services (NYDFS) was investigating Paxos.
The next day, Paxos published a Press release stating that it was cooperating with the New York Department of Financial Services (NYDFS) and would stop minting BUSD. The company added that “existing BUSD tokens will remain fully collateralized and redeemable through Paxos Trust Company at least three February 2024.” Along with the Paxos press release, the New York regulator issued a Notice to consumers regarding the binance usd (BUSD) stablecoin issued by Paxos.
Repurchases have begun, with nearly $290 million repurchased on Monday, after billions repurchased in recent months. Three months ago, the market capitalization of BUSD was around $23.24 billion and more than 30% of its supply has been bought up in the last 90 days. Monday’s buybacks caused slight price swings and BUSD fell to a low of $0.992245 February 13.
Much of BUSD trading today is associated with Tether (USDT), followed by the Turkish lira, Makerdao DAI and US dollar, according to statistics from cryptocompare.com on Monday. Prior to Paxos’ Monday morning press release, BUSD trading volume was around $15 billion, but it has since risen 18% to $17.60 billion as of 3:15 p.m. ET. East. In addition to the large number of buybacks, Binance CEO Changpeng Zhao (CZ) warns of significant repercussions on the crypto sector if BUSD is considered a security.
What impact will recent takeovers and regulatory review have on the future of BUSD and other stablecoins in the market? Share your thoughts in the comments section below.
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